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Whenever I read recommendations presuming a great expansion of Medicaid and its services, I take them with a grain of salt. They sound good in theory, the ideals are worthy, but the money simply is not there.

Due to their strong anti-industry bias, I was optimistic that the recently issued State Scorecard produced jointly by the SCAN Foundation, Commonwealth Fund and AARP would quietly disappear. Unfortunately, that was not the case.

Already, I’ve seen the Scorecard picked up on WebMD, right here on ProducersWEB, and shared vigorously across the Twitterverse. No doubt it will continue to appear in the mainstream media in the coming days.

While the SCAN Foundation’s heart is in the right place, their vision for universal health care tends to prejudice both their diagnoses of our present ills and prescriptions for future remedies. Consider the State Scorecard: on the basis of 25 arbitrary criteria, our states are ranked in four broad LTSS categories, including 1) affordability and access, 2) choice of setting and provider, 3) quality of life and care, and 4) support for family caregivers.

Even someone only casually acquainted with the features of a modern LTC policy could quickly rattle off how private insurance can address and/or improve each of those concerns. It would be to a state’s advantage to encourage the sale of private LTCI, or at least improve its awareness and education.

How did the State Scorecard approach LTCI?

After introducing estimated ownership of private LTCI as one of their 25 criteria (a line item statistic), the subject was never seriously brought up again in 40 pages. In the most widely-circulated extract — The Executive Summary — you will not find any mention of long term care insurance.

Instead, you’ll read a carefully written appeal for home and community based services “rebalancing” (i.e., a state is “balanced” when 50 percent of its Medicaid funds go toward NH and 50 percent toward home health care). Never mind that rebalancing has been thoroughly debunked.

You’ll read how states can exert direct control over policy decisions which can improve “access” and “choice," and lead to greater “affordability” and “higher quality” outcomes. These are buzzwords we take for granted in the private market.

The report argues in favor of Medicaid “self-direction," i.e., the ability for recipients to choose their providers, to hire and fire them, and schedule their hours. The cost of care is also bemoaned: in no state is nursing care deemed affordable. Instead, the national average cost of nursing home care is 241 percent that of the average annual household income.

HHC doesn’t fare much better, costing 88 percent of the typical household income.The obvious conclusion I felt they were leading up to during this section was how sensible a small, periodic premium for an insurance plan would be in place of these overwhelming care costs. Instead, SCAN ended with, “When the cost of care exceeds median income to such a great degree, many people with LTSS needs will exhaust their life savings and eventually turn to the public safety net for assistance.”

They had that all figured out beforehand.
Here’s where we have to tread lightly: I suspect the Scorecard will be well-received. The goals of the SCAN Foundation (et al) are
laudable. After all, who would want to see more elderly inpatients suffering from more pressure sores? Who would recommend against more home health aides per recipient? No one.

The disconnect occurs when their solutions point us down the same road that gave rise to the symptoms in the first place: an over-reliance on Medicaid. One need look no further than the section ironically entitled "Impact on Improved Performance.”

In this section, they tout the benefits of a more efficient program which would hypothetically add 670,000 new Medicaid enrollees. Using my back-of-the-napkin numbers (Washington state Medicaid HHC reimbursement rates), this would cost an additional $9.2 billion. A few paragraphs later, they mention a savings of $1.6 billion in fewer hospitalizations, but were they going to bring up that part about overspending a “net” $7.6 billion?

Even so, a few billion here or there is like rearranging deck chairs on the Titanic. That’s why I find reports like this so disingenuous to the public-at-large.

The states, collectively, have a $121 billion in debt going into FY 2012, and unlike the federal government, must balance their budgets. Behind education, Medicaid is typically the second largest item — it’s almost comical how it expands
and contracts from year to year as drunken promises are made and morning-after hangovers are inflicted.

At the federal Level, Medicaid is responsible for $103 billion of our nation’s LTC bill, and according to a GAO report at the beginning of this year, our three entitlements will soon put the country out of business. As soon as 2020, 89 cents of every federal dollar could go to Social Security, Medicare, Medicaid and interest.

Whenever I read recommendations presuming a great expansion of Medicaid and its services, I take them with a grain of salt. They sound good in theory, the ideals are worthy, but the money simply is not there.

I think the Scorecard’s title “Raising Expectations,” is fine. Given that Medicaid and other government-financed LTC is at the root of so many of our systemic troubles, I certainly had higher expectations than to see the keys handed back to that particular driver.

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About the Author

Since the early 1970's, the Formans have been pioneers in the field of long-term care insurance, helping to design some of the earliest plans, and testifying before Congress. Today, Stephen Forman and his 2 brothers carry on the family tradition of leading the industry as vocal proponents and tho... More